Exhibit 10.1


 


Certificate of Occupancy


 


Commercial Lease


 


This lease is made and
entered into by and between J. C. Ray Incorporated Landlord and TGC Industries, Inc.,
Tenant. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
that certain property with the improvements thereon, comprising a total of
three buildings in close proximity; two buildings containing approximately
10,000 square feet each, and the third building containing approximately 5,000
square feet, for a total of approximately 25,000 square feet of building space,
and  adjacent fenced, lighted and gated
outside storage yard of approximately 60,500 square feet, hereinafter called
the “leased premise”, known as address 3375 Juanita Drive, Denison, Texas
75020.


 


The primary term of this
lease shall be 5 years, commencing on the 1st. day of November 2008 and ending at 11:59 pm
on the 31st day of October, 2013, upon the following
terms, conditions, and covenants.


 


1.               TAXES.  Each year during the term of this lease,
Landlord shall pay real estate taxes assessed against the leased premises in an
amount equal to the total real estate taxes assessed against the leased premise
in the base year. Each year during the term of this lease, Tenant shall pay as
additional rental, upon receipt of a statement from Landlord together with tax
statements or other verification from the proper taxing authority, his pro rata
share of any increase in real estate taxes over the base year on the property
of which the leased premises is a part. Any increase in real estate taxes for a
fractional year shall be prorated. The base year shall be 2009.


 


2.               UTILITIES.  Tenant shall
pay all charges for utility services to the leased premises.


 


3.               HOLDING
OVER.  Failure of Tenant to
surrender the leased premise at the expiration of the lease constitutes a
holding over which shall be construed as a tenancy from month to month at a
rental of one hundred twenty five percent of the contracted monthly rate per
month.


 


4.               RENT.  Tenant agrees to and shall pay Landlord at
3355 Juanita Drive,Denison, Texas 75020, the total sum of $893,181.60, payable
without demand in equal monthly payments of $14, 886.36, each in advance on or
before the 1st day of each month, commencing on November 1,
2008, and continuing thereafter on a month to month basis. The monthly payment
is computed by adding the base monthly rental amount of $9,500.00 to the
monthly amortized cost of $5,386.36 which includes interest for Landlord
Improvements of approximately $270,742.40 as discussed in Exhibit “B”.  Rent received after the tenth day of the
month shall be deemed delinquent. If rent is not received by Landlord by the 10th
of each month, Tenant shall pay a late charge of 5.00% of base rental for each
month rent is in default. Tenant shall pay thirty five dollars for each
returned check.


 


5.               USE.  Tenant shall use the leased premise for the
following purposes: Equipment 


 


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repair, parking, storage of vehicles, trailers and goods, and for any
other purposes reasonably associated with or related to the seismic acquisition
business. Tenant is not to use the space within one foot of the outside wall.


 


6.               SECURITY  DEPOSIT.  Security deposit of $14,886.36,
representing the final months’ rent during the initial rent term, is due and
payable at lease inception.


 


7.               INSURANCE. 
Landlord shall pay for fire and extended coverage on the Buildings,
storage yard and other existing improvements on the leased premises in an
amount listed on existing policies. Tenant shall provide public liability and
property damage insurance for its business operations on the leased premises in
an amount of one million dollars, which policy shall cover the Landlord as well
as the Tenant. Said insurance policies required to be provided by Tenant herein
shall name Landlord as an insured and shall be issued by an insurance company
approved to do business in the state of Texas. Tenant shall provide Landlord
with certificates of insurance evidencing the coverage required herein. Tenant
shall be responsible for fire and casualty insurance on Tenant’s property on or
about leased premise. Tenant’s insurance shall be kept current. Tenant’s
failure to maintain aforementioned insurance shall constitute a default of this
contract and shall be dealt with as prescribed in section 14 of this contract.


 


8.               CONDITION OF PREMISES.  As of the date of signing of this lease
agreement,   Landlord is in the process
of constructing the buildings, leasehold improvements, and storage yard referred to
herein.  Landlord and Tenant expect that
leased premises,leasehold
improvements and storage yard referred to in Exhibit B will be suitable
for the purposes for which the same are leased.


 


9.               MAINTENANCE
AND REPAIRS.  Landlord
shall keep the foundation, the exterior walls (except glass, windows, doors,
door closure devices, window and door frames, molding, locks, hardware, and
interior painting or other treatment of exterior walls), the reinforced
concrete driveways referred to in Exhibit B, and the roof of the leased
premises in good repair except that Landlord shall not be required to make any
repairs occasioned by the act or negligence of Tenant, its employees,
subtenants, licensees and concessionaires. Tenant is responsible for
maintenance of the common area, except for the reinforced concrete driveways,
and common area equipment. Tenant shall keep the leased premises in good, clean
condition and shall at its sole cost and expense, make all needed repairs and
replacements, including replacement of cracked or broken glass, except for
repairs and replacements required to be made by the Landlord under this
section. If any repairs required to be made by Tenant are not made within ten
days after written notice delivered to Tenant by Landlord, landlord may at its
option make such repairs without liability to Tenant for any loss or damage
which may result by reason of such repairs, and Tenant shall pay to Landlord
upon demand as additional rent hereunder the cost of such repairs plus actual
interest incurred by Landlord.  At the termination
of this lease, Tenant shall deliver the leased premises in good order and
condition, normal wear and tear excepted. Normal wear and tear means
deterioration which occurs without negligence, carelessness, accident or abuse.


 


10.        ALTERATIONS.  All alterations, additions and improvements,
except trade fixtures, installed at expense of Tenant shall become the property
of the Landlord and 


 


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shall remain upon and be surrendered with the leased premises as part
thereof on the termination of this lease. Such alterations, additions, and
improvements may only be made with the prior written consent of Landlord, which
consent shall not be unreasonably withheld. If consent is granted for the
making of the improvements or alterations to the leased premises, such
improvements and alterations shall not commence until Tenant has furnished
Landlord a certificate of insurance showing coverage in an amount satisfactory
to the Landlord from liability for injury to any person and damage to any
personal property, on or off the leased premises, in connection with the making
of such improvements or alterations. No cooling tower, equipment, or structure
of any kind shall be placed on the roof or elsewhere on the leased premises by
Tenant without prior written permission of Landlord. If such permission is
granted, such work or installation shall be done at Tenant’s expense and in
such a manner that the roof shall not be damaged thereby. If it becomes
necessary to remove such cooling tower, equipment or structure temporarily, so
that repairs to the roof can be made, Tenant shall promptly remove and
reinstall the equipment at Tenant’s expense, so that the repairs can be made.
Upon termination of this lease Tenant will remove or cause to be removed such
equipment if directed by Landlord. At the termination of this lease Tenant will
deliver the leased premises in good order and condition, natural deterioration
only accepted. Any damages whatsoever caused by Tenant shall be repaired at
Tenants expense. All alterations, improvements, additions and repairs made by
Tenant shall be made in good and workman like manner.


 


11.             COMPLIANCE WITH LAWS AND REGULATIONS.  Tenant shall, at its own
expense, comply with all laws, orders, and requirements of all governmental
entities with reference to the use and occupancy of the leased premises. Tenant
and Tenants agents, employees and invitees shall fully comply with any rules and
regulations governing the use of the buildings or other improvements to the
leased premises as required by Landlord. Landlord may make reasonable changes
in such rules and regulations from time to time as deemed advisable for
safety, care and cleanliness of the leased premises, provided same are in
writing and are not in conflict with this lease.


 


12.             ASSIGNMENT AND SUBLETTING.  Tenant
shall not assign this lease nor sublet the leased premises or any interest
therein without first obtaining the written consent of the Landlord. An
Assignment or subletting without the written consent of Landlord shall be void
and shall, at the option of Landlord, terminate this lease.


 


13.             DESTRUCTION. 
In the event the leased premises is partially damaged
or destroyed or rendered partially unfit for occupancy by fire or other
casualty, Tenant shall give immediate notice to Landlord. Landlord may repair
the damage and restore the leased premises to substantially the same condition
as immediately prior to the occurrence of the casualty. If the leased premises
are totally destroyed or deemed by the Landlord to be rendered unfit for
occupancy by fire or other casualty, or if the Landlord shall decide not to
repair or rebuild, this lease shall terminate and rent shall be paid to the
time of such casualty.


 


14.             TENANT DEFAULT AND
REMOVAL OF ABANDONED PROPERTY.  If Tenant abandons the premises or
otherwise defaults in the performance of any obligations or covenants herein,
Landlord may enforce the performance of this lease in any manner provided by
law. This lease may be terminated at Landlord’s discretion if such 


 


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abandonment or default continues for a period of 10 days after Landlord
notifies Tenant of such abandonment or default and or Landlord’s intention to
declare this lease terminated. Such notice shall be sent by Landlord to Tenant
at Tenants last known address by certified mail. If Tenant has not completely
removed or cured default within the 10-day period, this lease shall terminate.
Thereafter, Landlord or its agents have the right without further notice or
demand, to enter the leased premises and remove all property without being
deemed guilty of trespass and without waiving any other remedies for arrears of
rent or breach of covenant. Upon abandonment or default by the Tenant, the
remaining unpaid portion of the rental from paragraph 4 herein, shall become
due and payable. For purposes of this section, Tenant is presumed to have
abandoned the premises if goods, equipment, or other property, in an amount
substantial enough to indicate a probable intent to abandon the premises, is
being or has been removed from the premises and the removal is not within the
normal course of Tenant’s business. Landlord shall have the right to store any
property of Tenant that remains on premises that are abandoned; and in addition
to Landlord’s other rights, Landlord may dispose of the stored property if
Tenant does not claim the property within 60 days after the date the property
is stored, provided Landlord delivers by certified mail to Tenant at Tenant’s
last known address a notice stating that Landlord may dispose of Tenant’s
property if Tenant does not claim the property within 60 days after the date
the property is stored.


 


15.             INTERRUPTION OF UTILITIES, Landlord or
Landlord’s agent may not interrupt or cause the interruption of utility service
paid directly to the utility company by Tenant unless interruption results from
bona fide repairs, construction, or an emergency. If any utility service
furnished by Landlord are interrupted and continue to be interrupted despite
the good faith efforts of Landlord to remedy same, Landlord shall not be liable
in any respect for damages to the person or property of Tenant or Tenant’s
employees, agents, or guests, and same shall not be construed as grounds for
constructive eviction or abatement of rent. Landlord shall use reasonable
diligence to repair and remedy such interruption promptly.


 


16.             EXCLUSION
OF TENANT.  Landlord may not intentionally prevent Tenant
from entering the leased premises except by judicial process unless the
exclusion results from (a) bona fide repairs, construction, or an
emergency; (b) removing the contents or premises abandoned by Tenant; or (c) changing
the door locks of Tenant in the event Tenant is delinquent in paying at least
part of the rent. If Landlord or Landlord’s agent changes the door lock of Tenant,
in the event the Tenant is delinquent in paying rent, Landlord or Landlords
agent must place a written notice on Tenant’s front door stating the name and
the address or telephone number of the individual or company from which the new
key may be obtained. The new key is required to be provided only during Tenant’s
regular business hours.


 


17.             LIEN.  Landlord is granted an expressed contractual
lien, in addition to any lien provided by law, and a security interest in all
property of Tenant found on the leased premises to secure the compliance by
tenant with all terms of this lease.


 


18.             SUBORDINATION.  Landlord is hereby irrevocably vested with
full power and authority to subordinate this lease to any mortgage, deed of trust, or other lien hereafter placed on the
demised premises and Tenant agrees on demand to execute such 


 


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further instruments subordinating this lease as Landlord may request,
provided such subordination shall be on the express condition that this lease
shall be recognized by mortgagee, and the rights of Tenant shall remain in full
force and effect during the term of this lease so long as Tenant shall continue
to perform all of the covenants and conditions of this lease.


 


19.             INDEMNITY.  Landlord and its employees
and agents shall not be liable to Tenant or Tenant’s employees, patrons,
visitors, invitees, or any other persons for any such injury to any such
persons or for damage to personal property caused by any omission, or neglect
of Tenant or Tenant’s agents or of any other Tenant of the premises of which
the leased premises is a part. Tenant agrees to indemnify and hold Landlord and
its employees and agents harmless from any and all claims for such injury and
damages, whether the injury occurs on or off the leased premises.


 


20.             SIGNS.  Tenant shall
not post or paint any signs at, or, about the leased premises or paint the
exterior walls of the building except with the prior written consent of the
Landlord. Landlord shall have the right to remove any sign or signs in order to
maintain the leased premises or to make any repairs or alterations thereto.


 


21.             TENANT  BANKRUPTCY.  If Tenant becomes bankrupt, makes
voluntary assignment for the benefit of creditors, or if a receiver is
appointed for Tenant, Landlord may terminate this lease by giving (45)  days
written notice to Tenant of Landlord’s intention to do so.


 


22.             CONDEMNATION.  If the whole or any substantial
part of the leased premises is taken for any public or quasi-public use under
any governmental law, ordinance or regulation or by right of eminent domain or
should the leased premises be sold to a condemning authority under threat of
condemnation, this lease shall terminate and rent shall be abated during the
unexpired portion of the lease effective from the date of the physical taking
of the leased premises.


 


23.             HAZARDOUS
MATERIALS.  Landlord warrants
and represents that the Property does not contain “Hazardous Materials”, as
that phrase is defined herein. For purposes of this provision, the phrase “Hazardous
Materials” shall mean and include any toxic contaminated or other hazardous
materials including, without limitation, asbestos. PCB, Transformers,
underground storage containers, materials containing any radioactive
substances, petroleum base products, paint, solvents, lead, cyanide, DDT,
acids, pesticides, ammonium compounds, and any other substance forming a
component part of the improvements which has heretofore or may in the future be
determined to contain toxic wastes, hazardous materials, or undesirable
substances injurious to the health of occupants living or working in or around
the subject property. Landlord acknowledges that current and future federal,
state, and local laws and regulations may require the clean up of any such
Hazardous Materials at the expense of those persons who in the past, present or
future may have had or continue to have any interest in the property including,
but not limited to, current, past, and future owners and users, including
tenants of the property. The cost and expense of such clean up may be
substantial. Landlord further acknowledges that the real estate brokers and
their agents involved in the negotiations of this transaction have no expertise
with respect to any such Hazardous Materials. Landlord acknowledges and agrees
that Landlord shall look solely to experts and professionals 


 


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selected by Landlord to
advise Landlord with respect to the condition of the property and shall not
hold the real-estate brokers or their agents responsible for any Hazardous
Material condition or problem relating to the property. Landlord hereby agrees
to indemnify, defend and hold the real estate brokers and their agents
participating in this transaction harmless of and from any and all liability,
claim, debt, damage, cost, or expense, including reasonable attorney’s fees,
related to or arising out of or in any way connected to Hazardous Materials and
or toxic wastes and or any other undesirable substances affecting the property.


 


Tenant shall, at Tenant’s sole cost and expense, comply with all laws,
ordinances, orders, rules and regulations promulgated by all federal,
state, county, municipal bodies and agencies having jurisdiction, which laws,
ordinances, orders, rules and regulations relate to the business of Tenant
and the effect of that business on the use, condition, structure or occupancy
of the property.


 


a) Without limiting the
foregoing, the term “Hazardous Waste Law” shall mean any provision of Federal,
State, County or regulatory or common law, in effect on the date hereof (and as
hereafter amended from time to time) or hereafter enacted or imposed,
pertaining to health, safety or environmental protection, including, without
limitation, the comprehensive environmental response, compensation and
liability act of 1980, as amended by Superfund Amendments and Reauthorization
Act of 1986, the resource conservation and recovery act of 1976 and the Texas Water
Code and the Texas solid waste disposal act. The term “environmental” means any
surface or subsurface strata, or the ambient air. The term “release” means any
spilling, leaking, escaping, leaching, dumping or disposing into the
environment.


 


b) Tenant represents and
warrants to Landlord that Tenant will not be involved in operations at or near
the property, which operations could lead to (A) the imposition of
liability under hazardous Waste Law on Landlord, or on any subsequent owner of
the Property, or (B) the creation of a lien on the Property under any
Hazardous Waste Law or under any similar laws or regulations.


 


Tenant agrees to indemnify
Landlord against and agrees to defend and to hold Landlord harmless from any
claim, obligation, liability, loss damage, or expense (including, without
limitation, attorneys fees and court costs), or whatever kind or nature,
contingent or otherwise, known or unknown, accruing after the execution date of
this lease, that is incurred or imposed based upon any Hazardous Waste Law and
that arises out of any act or omission of Tenant, its employees, agents or
representatives that causes the release of any substance in to the environment,
or that otherwise arises relating to the use, storage, or disposal of hazardous
materials.


 


d) Tenant agrees to comply
with all City of Denison Ordinances and Requirements.


 


24.             SPECIAL
PROVISIONS.  Attached as Exhibits “A” and “B”.


 


25.             NOTICES.  Notices to Tenant shall be
by certified mail or other delivery to TGC Industries, Inc., 101 E. Park
Blvd., Suite 955, Plano, TX  75074,
and Attn: Wayne Whitener. Notices to the Landlord shall be by certified mail to
the address where rent is paid.


 


26.             DEFAULT BY LANDLORD.  In the event of breach by Landlord of any
covenant, term or obligation of this lease, then Landlord’s failure to cure
same or commence a good 


 


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faith effort to cure same within 10 days after written notice thereof
by Tenant shall be considered a default and shall entitle Tenant either to
terminate this lease or cure the default and make the necessary repairs and any
expense incurred by Tenant shall be reimbursed by Landlord after reasonable
notice of the repairs and expenses incurred. If any utility services furnished
by Landlord are interrupted and continue to be interrupted despite the good
faith efforts of Landlord to remedy same, Landlord shall not be liable in any
respect for damages to the person or property of Tenant or Tenant’s employees,
agents, or guests, and same shall not be construed as grounds for constructive
evasive or abatement of rent. Landlord shall use reasonable diligence to repair
and remedy such interruptions promptly.


 


27.             SIGNS.  During this
lease a “For Sale and/or For Rent/Lease” sign may be displayed on the leased
premises and the leased premises may be shown at reasonable times to
prospective purchasers or tenants.


 


28.             RIGHT OF ENTRY.  Landlord shall have the right
during normal business hours to enter the premises, a) To inspect the general
condition and state of repair thereof, b) to make repairs required or permitted
under this lease, or, c) for any other reasonable purpose.


 


29.             WAIVER OF BREACH.
 The waiver by Landlord of any breach
of any provision of this lease shall not constitute a continuing waiver or a
waiver of any subsequent breach of the same or a different provision of this
lease.


 


30.             TIME OF ESSENCE.  Time is expressly declared to be of the
essence in this lease.


 


31.             Deleted.


 


32.             RIGHTS AND REMEDIES CUMULATIVE.  The rights and remedies by this lease agreement are cumulative and
the use of any one right or remedy by either party shall not preclude or waive
its right to use any or all other remedies. Said rights and remedies are given
in addition to any other rights the parties may have by law, statue, ordinance,
or otherwise.


 


33.             TEXAS LAW TO APPLY.  This agreement shall be construed
under and in accordance with the laws of the state of Texas. Any disagreements
involving legal issues will be settled by arbitration rather than due process.


 


34.             LEGAL CONSTRUCTION. 
In case any one or more of the provisions contained in this
agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, or unenforceability shall not affect any other
provision hereof and this agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been herein.


 


35.             PRIOR AGREEMENTS SUPERSEDED.  This
agreement constitutes the sole and only agreement of the parties to this lease
and supersedes any prior understandings or written or oral agreements between
the parties respecting the subject of this lease.


 


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36.             SALE OF LEASED PREMISES. 
In the event that Landlord sells or conveys leased premises, the rights
of Tenant and terms of this lease agreement shall remain in full force and
effect during the term of this lease, including rights contained in Exhibit “A”
Renewal Option, so long as Tenant shall continue to perform all of the
covenants and conditions of this lease.


 


EXHIBITS:


 


Exhibit “A” – Renewal Option


Exhibit “B” – Landlord Improvements


 


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This is a legal document, read it
carefully; if you do not
understand the effect of any part of this agreement, seek competent legal
advice.


 


Executed this 4th day of August,    2008


 


	
  Tenant

  	
  Landlord

  
	
   

  	
   

  
	
  TGC Industries, Inc

  	
  J.C. Ray Incorporated

  
	
  101
  E. Park Blvd., Suite 955

  	
  3355 Juanita Drive

  
	
  Plano, Texas 75074

  	
  Denison, Texas 75020

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Wayne A. Whitener

  	
   

  	
  /s/ Jimmy C. Ray

  	
   

  
	
  Wayne A. Whitener

  	
  Jimmy C. Ray, President

  
	
  President and CEO

  	
  Landlord

  
				



 


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EXHIBIT
“A”


RENEWAL
OPTION


 


Provided that at the end of the primary term of this lease Tenant is
not in default of any term or condition contained in this lease, Tenant shall
have the right and option to renew this lease by written notice delivered to
Landlord no later than 90 days prior to the expiration of the primary term, for
the additional term of five years under the same terms and conditions contained
herein, except:


 


A.  The rental for the renewal
term shall be based on the base rent of $9,500.00 per month and adjusted
annually using the Consumer Price Index (CPI-U US City Average, All Items)
published by the U.S. Department of Labor, Bureau of Labor Statistics.


 


B.  Upon notification from Tenant
of the exercise of this renewal option. Landlord shall within 15 days
thereafter notify Tenant is writing of the proposed rental, as computed in
preceding paragraph A, for the renewal term; 
Tenant shall within 15 days following receipt of same notify Landlord in
writing of the acceptance or rejection of the proposed rent.


 


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EXHIBIT “B”


LANDLORD IMPROVEMENTS


 


Landlord agrees to build out and install, at Landlord’s expense, and in
good and workmanlike manner:


 


A.           Certain walls, doors,
flooring, ceilings, offices, storage rooms, and related improvements including
applicable electrical wiring, three phase wiring in building 2,  air conditioning and related ductwork,
lighting including outside lighting for the above mentioned storage yard, as
shown on architectural plans previously delivered to Landlord, having the
approximate cost of $270,742.40 and included in the monthly rent amount as
stated in section 4 above, and,


 


B.             Reinforced concrete
driveways capable of withstanding the weight of large trucks, and trailers,
including vibroseis trucks.


 


Landlord will complete the Landlord Improvements by November 1,
2008.  Upon termination of the Lease,
Landlord Improvements shall remain in the Leased Premises and shall be deemed
Landlord’s property.  Tenant may, at its
option and at any time during the lease agreement, and without penalty, make
payment or payments to Landlord to be applied to Landlord Improvements to
reduce monthly rent by a corresponding amount plus interest.


 


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